Mr. West reiterated the company’s focus on preparing itself to become a “strong, stand-alone business” and once again said the firm is continuing to fight to restore the cancelled MAPLE reactor project, which was axed by the federal government and Atomic Energy of Canada Ltd.
Still, the meeting was not without interesting developments.
Shareholders of MDS (TSX:MDS) – which has almost wrapped up its move to Ottawa from Toronto following the completion of the sale of its early-stage Pharma Services business on Monday – voted in favour of renaming the company Nordion Inc. to reflect its new focus on the Ottawa-based medical isotopes business.
While the actual rebranding won’t take place for many months more, the development signifies the end of an era for the company that began its life in 1969 as Medical Data Sciences Ltd.
As well, Mr. West announced that MDS is closing the doors on the possibility of turning to Russia’s Karpov Institute as a commercially viable source of isotopes, due to the recent results of feasibility studies.
It wasn’t a material announcement as there had been no firm expectations that MDS and Karpov would have been able to proceed, Mr. West told OBJ in an interview, but the news eliminates another option in MDS’s race to find a long-term alternative to the aging, problematic National Research Universal reactor.
Mr. West acknowledged that MDS is still working on finding a solution before the NRU goes out of service, but indicated the company still has the time and resources to deal with the issue.
“There are three time zones here; with immediate supply, NRU is the obvious choice. In the medium term, the primary breach is the reinvestment and relicensing of the NRU until 2016,” said Mr. West.
Beyond that, he said, the company is expecting to source isotopes from a combination of reactor-based sources and alternative methods such as photofission, a technique it’s developing in partnership with the TRIUMF lab for particle and nuclear physics and the University of British Columbia.
The good news with that is MDS anticipates samples from the TRIUMF joint venture by 2012, a few years before the expiry of the NRU licence.
The federal government’s provision of $45 million over the next two years in the 2010 budget for isotope research could also benefit MDS, although Mr. West was more cautious about the prospects for that funding.
“We’re pleased the government has recognized the importance of the issue … We expect we’re well-placed through partnerships (to access the funds),” he said. “The important thing is to maintain our global leadership, and to do that we need to innovate new products (but also) to make sure the money goes to viable products that can be commercialized.”
Meanwhile, MDS faces other issues such as the “lumpiness” of the supply of cobalt needed for its sterilization business, although Mr. West said the challenge was not quite in the same category as the difficulties surrounding the NRU.
“One of the things we’e learned through the challenges around supply is that we’ve proven we have resilience – we haven’t laid anyone off, and we’re investing so we remain the partner of choice,” he noted.
“We’ve built an innovative portfolio and we will continue to be viable and driven through disciplined investment.”
